Glaxo to buy biotech Sirtris in $720 mln deal

NEW YORK (Reuters) - GlaxoSmithKline Plc GSK.L said on Tuesday it had agreed to buy biotechnology company Sirtris Pharmaceuticals Inc SIRT.O for $720 million in cash, in hopes its medicines that modulate an aging-related family of enzymes will be effective against a wide range of diseases.

A GlaxoSmithKline logo is seen outside one of its buildings in west London, February 6, 2008. REUTERS/Toby Melville

Glaxo said it will commence a cash tender offer for all outstanding shares of Sirtris, at $22.50 per share. That reflects a 84 percent premium to their closing price of $12.23 on Tuesday.

“Through the acquisition of Sirtris, GlaxoSmithKline will significantly enhance its metabolic, neurology, immunology and inflammation research efforts by establishing a presence in the field of sirtuins, a recently discovered class of enzymes that are believed to be involved in the aging process,” the companies said in a joint release.

Glaxo said it plans to retain all Sirtris employees, which will continue to operate in Cambridge, Massachusetts, as an independent unit.

“Almost all diseases have as their basis the aging process, including cancer and heart disease,” Sirtris Chief Executive Christoph Westphal said in an interview.

“Glaxo’s interest is in broad discovery, in going after several sirtuins to treat diseases of aging such as neurodegeneration, muscle wasting, inflammation and Type 2 diabetes,” Westphal said. “We’re both very excited in treating these diseases of aging in a new way.”

Westphal said several other companies are also exploring such treatments, but that Sirtris appears to be at least several years ahead in terms of acquiring patents and conducting clinical trials.

In early-stage trials of patients with Type 2 diabetes, he said, one experimental Sirtris drug was significantly able to improve insulin sensitivity -- meaning the ability of the body’s insulin to break down blood sugar. It also showed a trend toward controlling glucose, he said.

Type 2 is the most common form of diabetes, and usually develops in adulthood.

In another deal announced just five days ago, Glaxo boosted its position in biotech by signing a collaboration agreement that could be worth up to $600 million with Regulus Therapeutics, taking it into the hot area of RNA technology.

The arrangement covers joint research into experimental drugs designed to block or “silence” microRNAs -- tiny strands of RNA, or ribonucleic acid, that help turn genes into proteins.

Regulus is a joint venture between U.S. biotech companies Alnylam Pharmaceuticals Inc ALNY.O and Isis Pharmaceuticals ISIS.O.

Glaxo’s biggest recent foray into biotech was the $453 million acquisition of Domantis Ltd completed in January of 2007.

Through its growing number of acquisitions and external alliances over the past two years, Glaxo is hoping to expand its roster of experimental drugs.

The high price it is paying for such early-stage research underlines the current hunger among large pharmaceutical companies for promising biotech assets.

Additional reporting by Bill Berkrot in New York and Ben Hirschler in London; Editing by Carol Bishopric, Richard Chang, Gary Hill